I'm the environment editor at Forbes. Before joining Forbes in April 2011, I wrote about all things green and tech as a contributor to The New York Times, a senior editor at Fortune and an assistant managing editor at Business 2.0 magazine. I previously was the business editor at the San Jose Mercury News and during the (first) dot-com era served as a senior writer and senior editor at The Industry Standard (RIP).

U.S. Hits Chinese Solar Manufacturers With Higher Tariffs

The U.S. Department of Commerce on Wednesday slapped Chinese biggest solar manufacturers with tariffs as high as 36%, concluding in a final ruling that they illegally dumped cheap photovoltaic cells on the American market.

The anti-dumping tariffs roughly mirrored those the Commerce Department issued in a preliminary ruling in May. But the department jacked up the anti-subsidy tariff. For Suntech, China’s biggest and most embattled solar manufacturer, the total tariff issued Wednesday jumped to nearly 47% from 34% in May. But the Commerce reduced the final tariffs by 10.54% to account for an export subsidy all manufacturers received.

The tariffs will become final if the U.S. International Trade Commission finds that the Chinese companies illegally dumped solar cells, a decision that is due Nov. 7.

But the solar war trade war is far from over.

The U.S. subsidiary of German manufacturer SolarWorld, which filed the trade case last year, has vowed to pursue other actions to stop Chinese manufacturers from selling solar cells they obtain outside China. The Commerce Department ruling only applies to photovoltaic cells made in China and companies like Suntech, Trina Solar and Yingli have moved to secure supplies from third countries that they can sell in the U.S. tariff-free.

“Assuming the International Trade Commission rules in our favor next month, we plan to ask the Commerce Department and Customs and Border Protection to address the circumvention issue through strict enforcement actions,” Gordon Brinser, president of SolarWorld Industries America, said in a statement.

The fight has divided the U.S. solar industry as solar installers and other companies have benefited from a 75% plunge in photovoltaic module prices over the past three years that resulted from Chinese manufacturers vastly expanding production, sometimes with the aid of government assistance and cheap bank loans

“We remain concerned about the growing global trade war, which will only hurt American solar industry jobs, growth and consumers,” Jigar Shah, president of the Coalition for Affordable Solar Energy, a group opposed to the trade case, said in a statement. “We believe that global competition is good for American solar consumers and companies.”

The tariffs decision is more bad news for China’s solar industry, which faces crushing debt loads and excess manufacturing capacity. Suntech, for instance, is scrambling to find a way to meet a half-billion dollar payment due in 2013 on convertible notes. In September, the company said it would temporarily idle some of production lines. Shares of Suntech, which faces delisting from the New York Stock Exchange because its stock has been trading below $1, were trading at 89 cents after hours Wednesday.

“Unilateral trade barriers will not make any one company more competitive, but will make solar less competitive against other forms of electricity generation,” E.L. “Mick” McDaniel, managing director of Suntech America, said in a statement. “As a multinational company with global supply chains and manufacturing facilities in three countries, including Goodyear, Ariz., we will continue to provide our customers in the U.S. with hundreds of megawatts of high-quality and affordable solar products that will not be subject to tariffs.”

But both those manufacturers benefited from a reduction in tariffs levied in the May preliminary decision. In its final ruling, the Commerce Department Wednesday imposed a 24% tariff against Trina – compared to a preliminary rate of 36% – and a 31% tariff against Yingli, a reduction from the 35% tariff in the original ruling.

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This is a positive step as the US has a significant trade deficit with China. Now if they want to expand trade with the United States by US owned companies and have a dollar for dollar balanced trade, then perhaps the tariffs can be removed. They should also be monitored for sidestepping the tariffs and importing products from countries where no tariffs exist.